Bill C-52 (Historical)

Budget Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007

Part 1 implements income tax measures proposed or referenced in Budget 2007 to
(a) introduce a tax on distributions from certain publicly traded income trusts and limited partnerships, effective beginning with the 2007 taxation year;
(b) reduce the general corporate income tax rate by one half of a percentage point, effective January 1, 2011;
(c) increase the age credit amount by $1,000 from $4,066 to $5,066, effective January 1, 2006;
(d) permit income splitting for pensioners, effective beginning in 2007;
(e) introduce a new child tax credit of $2,000 multiplied by the appropriate percentage for a taxation year, effective beginning in 2007;
(f) increase the spousal and other amounts to equal the basic personal amount, effective beginning in 2007;
(g) increase the age limit for maturing registered retirement savings plans, registered pension plans and deferred profit sharing plans to 71 years of age, effective beginning in 2007;
(h) expand the types of investments eligible for registered retirement savings plans and other deferred income plans, effective March 19, 2007; and
(i) increase the contribution limits for registered education savings plans and expand eligible payments for part-time studies, effective beginning in 2007.
Part 1 also amends the Canada Education Savings Act to increase the maximum annual grant payable on contributions made to a registered education savings plan after 2006.
Part 2 amends the Excise Tax Act to clarify the legislative authority that allows the Canada Revenue Agency to pay refunds of excise tax directly to end-users, where fuel subject to excise has been used in tax-exempt circumstances. It also amends that Act to repeal the excise tax on heavy vehicles and to implement the Green Levy on vehicles with fuel consumption of 13 litres or more per 100 kilometres. It also provides an authority for the Canada Revenue Agency to pay a refund of the Green Levy for vans equipped for wheelchair access.
Part 3 implements goods and services tax/harmonized sales tax (GST/HST) measures proposed or referenced in Budget 2007. It amends the Excise Tax Act to exempt midwifery services from the GST/HST and to zero-rate certain supplies of intangible personal property made to non-GST/HST registered non-residents. It also amends that Act to repeal the GST/HST Visitor Rebate Program and to implement a new Foreign Convention and Tour Incentive Program, which provides rebates of tax in respect of certain property and services used in the course of conventions held in Canada and the accommodation portion of tour packages for non-residents, and establishes new information requirements in the case where rebates are credited by the vendor.
Part 4 implements other measures relating to taxation. It amends the Customs Tariff to increase the duty-free exemption for returning Canadian residents, from $200 to $400, for absences from Canada of not less than 48 hours. It amends the Federal-Provincial Fiscal Arrangements Act to clarify that when a federal corporation listed in Schedule I to that Act pays provincial taxes or fees, wholly-owned subsidiaries of that corporation also pay provincial taxes or fees. It also authorizes the Minister of Finance to make payments totaling $400 million out of the Consolidated Revenue Fund to the Province of Ontario to assist the province in the transition to a single corporate tax administration. This last measure is consequential to the October 6, 2006 Canada-Ontario Memorandum of Agreement Concerning a Single Administration of Ontario Corporate Tax.
Part 5 enacts the Tax-back Guarantee Act, which legislates the Government’s commitment to dedicate all effective interest savings from federal debt reduction each year to ongoing personal income tax reductions. That Part also commits the Minister of Finance to report publicly at least once a year on personal income tax relief provided under the Guarantee to Canadians.
Part 6 amends the Federal-Provincial Fiscal Arrangements Act to set out the amounts of the fiscal equalization payments to the provinces and the territorial formula financing payments to the territories for the fiscal year beginning on April 1, 2007 and to provide for the method by which those amounts will be calculated for subsequent fiscal years. It also authorizes certain deductions from those amounts that would otherwise be payable under that Act. In addition, it makes consequential amendments to other Acts.
Part 6 also amends that Act to provide increased funding for the Canada Social Transfer beginning on April 1, 2007, and to provide for the method by which the Canada Social Transfer and the Canada Health Transfer amounts will be calculated for subsequent fiscal years, including per capita cash allocations. It also provides for transition protection.
Part 7 amends the Financial Administration Act to modernize Crown borrowing authorities.
Part 8 amends the Canada Mortgage and Housing Corporation Act to permit the Minister of Finance to lend money to the Canada Mortgage and Housing Corporation.
Part 9 amends the Bankruptcy and Insolvency Act, the Canada Deposit Insurance Corporation Act, the Companies’ Creditors Arrangement Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act to allow the Governor in Council to prescribe the meaning of “eligible financial contract”. Those Acts are also amended to provide that, after an insolvency event occurs, a party to an eligible financial contract can deal with supporting collateral in accordance with the terms of the contract despite any stay of proceedings or court order to the contrary. This Part also includes amendments to the Bankruptcy and Insolvency Act and the Winding-up and Restructuring Act to provide that collateral transactions executed in accordance with the terms of an eligible financial contract are not void only because they occurred in the prescribed pre-insolvency or winding-up period.
Part 10 authorizes payments to provinces and territories.
Part 11 authorizes payments to certain entities.
Part 12 extends the sunset provisions of financial institutions statutes by six months from April 24, 2007 to October 24, 2007.
Part 13 amends the Department of Public Works and Government Services Act to provide the Minister of Public Works and Government Services with the power to authorize another minister, to whom he or she has delegated powers under that Act, to subdelegate those powers to the chief executive of the relevant department. That Act is also amended with respect to the application of section 9 to certain departments.
Part 14 amends the Financial Consumer Agency of Canada Act to allow the Minister of Finance to provide funding to the Agency for activities related to financial education.

Budget Implementation Act, 2007

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-52, the government's bill to implement its budget.

I had the privilege of speaking to the budget itself when it was first tabled in the House and was pleased to represent the concerns of people in my riding of Hamilton Mountain during that debate.

Unfortunately, there was little time to explore any one issue in greater detail so I am pleased to use this opportunity today to focus on just one specific area, and that is the budget's appalling silence on the decline of Canada's manufacturing sector and its failure to create either a steel or an auto sector strategy.

With the government's fiscal capacity, the budget was a huge opportunity to invest and yet the government chose instead to squander this important opportunity. It is no wonder that the rich are getting richer and the poor are getting poorer.

Workers are finding it harder and harder to make ends meet as the prosperity gap in the country grows. While we are seeing stagnating wages for average workers, folks at the high end are doing better and better. The top 100 CEOs in this country make in a few hours what the average Canadian worker makes in an entire year. The earnings of the richest 10% of Canadian families now stand at 82 times of those of the poorest 10%.

The rich are making more while working families are working harder and longer, 200 hours longer on average, just to make ends meet. At the same time, we are experiencing a crisis in the manufacturing sector. Over the last five years we have lost 4,300 jobs in the steel sector in Hamilton alone with another 300 jobs in jeopardy once Stelco's hot strip mill is closed. Some of the losses were from bankruptcies and plant closures while others are the result of continuous downsizing where there are still more losses to come as the nature of the industrial marketplace changes in the global economy.

The job losses did not begin and end with the steel industry. We lost Studebaker, International Harvester, Westinghouse, Proctor & Gamble, J.I. Case, Firestone and hundreds of smaller plants. Those are just some of the big names from Hamilton's past, and the list of losses continues to grow.

More recent ones that pop to mind, again from just the past five years, are Siemens Westinghouse with 332 layoffs and Camco where 716 lost their jobs when the plant closed and 284 more workers ended up on temporary layoff. The Tiercon plant closure saw another 700 jobs lost. There were bankruptcies and plant closures at Rheem, Philip Environmental, Hercules, Mak Steel, Frost Fence, Dominion Castings, Cold Metal Products and ACI Automotives. New permanent layoffs are happening every month in the industrial manufacturing sector in Hamilton and there is no end in sight.

Across Canada, a quarter of a million manufacturing jobs have been lost since 2002; more than one in ten jobs due to layoffs, plant closures and the non-replacement of retiring workers.

I have seen the impacts of these job losses first-hand. In Hamilton I have been meeting regularly with the workers and retirees at Hamilton Specialty Bar who are once again uncertain about their futures and pensions because the company that runs the plant is under bankruptcy protection for a second time. The first time the Hamilton Specialty Bar plant went into bankruptcy protection it was the United Steelworkers, not the government, that did the work to find a new buyer for the plant to save both jobs and the pension plan.

This time the Steelworkers are working just as hard but there is no investor or buyer in sight. Once again, the government is doing nothing to help them. If no buyer is found the plant will shut down for good in May, which means that 380 workers will be out of jobs and 500 retirees will lose up to 20% of their pensions.

These are good jobs we are losing. Manufacturing jobs pay 28% higher wages than the national average. More often they come with decent pension and benefit packages.

Some analysts and politicians will tell us that there is no reason to worry, that these jobs are being replaced by jobs in other sectors. However, all jobs are not created equal.

Statistics Canada recently found that workers displaced by firm closures and mass layoffs who find other jobs suffer an average decline of 25% in annual earnings. That is a loss of $10,000 for a typical manufacturing worker. That is devastating for ordinary workers and their families but it also has a huge impact on our communities.

With a loss of one-quarter of a million manufacturing jobs, the total loss of Canadian earnings is estimated at around $2.5 billion annually. Just think of what that means in terms of spending and revenues for other sectors of our economy.

Workers are losing their jobs but the government's budget is doing nothing to address the growing crisis in the manufacturing sector. Workers are finding it harder and harder to get by but the budget is doing nothing to close the growing prosperity gap.

How did we get here? First, through downloading, funding cuts and trade deals the Liberals and the Conservatives have drastically reduced the capacity for the federal government to play a positive and helpful role in ensuring that the fundamentals are in place so that economic and social assistance can adjust, innovate and change at the same time as ensure a cushion for the blows of the unchecked market.

Second, with the limited capacity they do have, successive governments in Canada have had no vision and no plan to get right those things that we as a society expect from our federal government.

In their recent budget, the Conservatives simply stuck to the same old tried and failed path. Rather than working to close the prosperity gap with their budget, the Conservatives actually widened it. They maintained over $8 billion in corporate tax cuts, tax cuts brought in by the Liberals.

The budget provided no money for the things that would make life more fair and affordable for everyday Canadians, things like child care, pharmacare, transit, housing and student debt. Of course, the Conservatives, like the Liberals, have not put forward a plan to deal with the loss of manufacturing jobs.

New Democrats, on the other hand, have consistently fought for justice for all workers in their workplace. For too long workers have been left behind while Conservative and Liberal governments give handouts to their corporate friends.

It is time for fairness. I would urge the government to amend its budget bill to include initiatives that will make life more fair and more affordable for workers and their families. At a minimum these should include: secure pensions, by putting workers' pensions at the front of the line when employers go bankrupt; adequate employment insurance, by overhauling the EI system which denies two-thirds of workers any benefits; a reliable safety net, by reforming the social assistance programs that have become an ineffective, unaccountable patchwork since the Liberals abolished the Canada assistance plan; the protection of workers' rights, by protecting collective bargaining rights with progressive measures like outlawing replacement workers that prolong labour disputes; and a fair trade policy, by making workers and the environment a priority.

We in the NDP have a different vision of the kind of economy that we should be creating in the 21st century. I believe that the economy ultimately must be judged on how well it meets the needs and aspirations of the people it serves.

I believe that in a market economy the federal government has an obligation to ensure that the social and physical infrastructures are in place to ensure individual goals and collective needs are met. That is why we are working to strengthen the public service and health care and why we are working to get results on climate change, on labour rights and on real equality. Getting results on these issues will make life more secure and affordable for ordinary Canadians but they will also create a competitive advantage for our economy.

The budget exhorted Canadians to “aspire”. All Canadians had hoped for in the budget was a little bit of fairness. Their hopes were dashed when the finance minister rose to read the budget.

Canadians deserve more. They deserve better. They deserve the fairness they have been asking for.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I often speak with seniors in my riding and they tell me that their hydro bills, their Roger's cable bills, their heating bills and their property taxes, et cetera, have increased and yet for 10 to 15 years their guaranteed income supplement has not caught up. They recently received a tiny increase.

Some of the seniors in my riding are desperate. They are asking the government what it plans to do to increase the guaranteed income supplement for seniors.

Since this increase in the guaranteed income supplement is not in the budget that is in front of us, what is the NDP's plan to ensure that ordinary Canadians, especially seniors, can live their lives with dignity and have some money to pay the rent and buy food?

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, my colleague hits the nail right on the head. Seniors in our community are finding it increasingly difficult to make ends meet. They have worked hard all their lives. They have played by the rules. In fact, they have built the very system that they hoped would be there for them in their retirement years, but unfortunately that system is crumbling around them.

My colleague was addressing income supports only. She is absolutely right. There was no mention in the government's budget of substantial increases to the GIS, the OAS or the CPP, all of which are critical components of most seniors' retirement incomes.

Worse than that, though, the government is not even willing to live up to its legislated mandate, which would mean that the cost of living increases must be paid to seniors on those retirement income supports. We know there has been an error in Statistics Canada's calculation that has underestimated the cost of living increase. As a result, seniors are actually owed money from 2001 until 2006, when that mistake was fixed.

However, the government has refused to fix it retroactively, and we are talking about some of the poorest, neediest people in our communities. Seniors need their incomes. They need their incomes, and not for luxuries, as they are not buying plasma TVs and iPods; they are just trying to get buy. They are trying to pay for their heat, hydro, rent and food, the basic necessities of life. The government has not been there for them. Worse yet, it has not even lived up to the obligation it has to index their incomes as a result of the cost of living increases.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, I listened to the member's statement. It seems pretty clear that she has some concerns with respect to seniors and seniors' incomes. That is shared by the government. That is why the government has moved to change taxation for seniors in such a dramatic fashion.

We have increased the age credit and the pension allowance. We took 655,000 taxpayers completely off the tax rolls in budget 2006 and over 200,000 in budget 2007, the overwhelming majority of those being low income seniors.

This government cares about seniors. It cares about looking after them. We are putting money into health care. We are reducing their burden. These are seniors' priorities. This government listens and we are getting it done. I would like to know why the member does not support that.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I would be pleased to share with the member why I do not support that, and I thank him for giving me the opportunity.

Yes, the budget created a tax credit for pensionable income, but that is not the income support that most seniors rely on. That credit is purely on private pensions. Seniors who actually rely on public income supports like the GIS, the OAS and the CPP do not benefit from that change at all.

Worse yet, what the government also did, and what the member forgot to remind our colleagues about, is that it raised the lowest tax rate. The Liberals reduced it from 15.5% to 15% and the member's government raised it back up to 15.5%. The very poorest seniors in our country are now paying half a per cent more in income taxes than they were before the member's government took over.

Seniors deserve more than lip service from the government. I would encourage the member and his government in the next budget to realize that opportunity and to stand up for seniors and give them more than empty rhetoric.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am pleased to speak about Bill C-52, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007.

In this House, the Bloc Québécois has decided to vote in favour of this budget. This budget is important to the Bloc Québécois, as my colleague from Joliette has explained in detail. Still, I would like to go a bit farther and explain the Bloc Québécois' position on this budget.

We have always said that the Bloc Québécois is in Ottawa to defend the interests of Quebec until Quebeckers decide, by a majority vote in a referendum, to create their own country. Needless to say, I hope this happens as soon as possible. In the meantime, the Bloc is in Ottawa to defend Quebec's interests. Implementing this budget will serve Quebec's interests.

The bill we are studying today contains five categories of important tax measures that were announced on March 19: a tax fairness plan, some tax relief, continued GST refunds for conferences and tours—something the Bloc Québécois called for—changes to the rules for RRSPs and RESPs, and a surtax on inefficient vehicles.

Implementation of this budget will have very important benefits for the Bloc Québécois. First and foremost, $3.3 billion will be paid to address the fiscal imbalance. Despite what the Minister of Finance says, it is not true that the fiscal imbalance has been corrected.

[Maka Kotto, Bloc, Saint-Lambert, QC]

Far from it.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Far from it, as my colleague from Saint-Lambert says. The fiscal imbalance is a long way from being corrected completely, but we have taken a step in the right direction. That is why we are supporting this bill.

If it were not for the Bloc Québécois we would not even be talking about the fiscal imbalance. If it were not for the numerous interventions by the Bloc Québécois, stemming from the Séguin report in 2001, we would not be talking about correcting the fiscal imbalance. Our colleagues in the Liberal Party still have a hard time saying the words “fiscal” and “imbalance”. The leader of the Liberal Party, the Leader of the Opposition, does not even want to say it. Imagine what this would be like if the Liberals were in power.

The current government listened to the arguments and is implementing a policy that will allow Quebec to recover $3.3 billion during the third year. Furthermore, this year Quebec will receive more than $2 billion, which will be extremely useful in meeting the needs of Quebec.

In order for those who are watching us to understand, the fiscal imbalance is not complicated. They try to make it complicated, but it is not. The needs are in the provinces and the money is in Ottawa. That is the fiscal imbalance.

The Bloc is calling on the federal government to stop spending and to start giving the provinces, and Quebec in particular, the money they need for education, health, implementing its cultural program, etc. The federal government has to stop trying to interfere in Quebec's jurisdictions. That is what we mean by correcting the fiscal imbalance. If it were not for the repeated interventions of the Bloc Québécois in Ottawa and the unanimity at the National Assembly of Quebec, we would not even be talking about this here today.

We would still be seeing a huge gulf forming between the federal government and the provinces, in that all the money goes to Ottawa and none goes back to the provinces. We are told that we in Quebec are whiners, but people need to realize that if the government stopped spending in provincial jurisdictions and started transferring money to the provinces, including Quebec, we would not have to beg for our money. It is indeed our money.

For the information of those who are watching us, there are currently 16 strictly provincial jurisdictions, of which 13 have been invaded by the federal government. The federal government has no business being there. It needs to withdraw and transfer money instead. When it comes to child care, the environment, education, health, culture and sports, I sincerely think that the Government of Quebec knows what it has to do for the welfare of Quebeckers.

At least one step has been taken toward correcting the fiscal imbalance. However, we must point out in this House that it is far from being resolved. The Bloc Québécois will continue to ask for this issue to be resolved.

If the government really wanted to correct the fiscal imbalance, it would transfer tax fields. Forget about equalization; it has become rather complex. Our plan would transfer tax points to promote development in Quebec and the other provinces.

Unfortunately, that is not the government's plan. I know that work will be done, and the Bloc Québécois will keep a close eye on the government in the Standing Committee on Finance so that someday—so long as Quebeckers are not sovereign—the fiscal imbalance will be resolved.

Another important envelope to be allocated when this budget is implemented is the $328 million ecotrust funding that Quebec is to receive. This money will support Quebec's plan to fight climate change.

It is quite simple, really. The government has to understand that it must stop messing around and invest in protecting the environment. We know that the Minister of the Environment has been unable to give a straight answer about whether or not it is important to comply with the Kyoto protocol.

In Quebec, there is no such ambiguity: the parties in the National Assembly are unanimous, as is civil society. We want the Kyoto protocol to be implemented because it is extremely important for protecting our environment.

The minister should stop scaring us by saying that if Kyoto is implemented, it could cost us a fortune and there could be a recession. Has the minister forgotten that Quebec has already begun implementing the Kyoto protocol? Hydroelectricity is our main source of power. Research is being done in this field, on developing hydroelectric and wind power—in which the federal government has not invested one red cent.

I do not have much time left, but I would like to touch on another file that is very important to the Bloc Québécois: the GST refund for foreign visitors. We asked for this; in fact, it was one of the main things we asked for.

In closing, I would like to say that this budget is inadequate. More must be done. Federal transfers in this budget are not quite enough to eliminate the financial pressures that Quebec is now feeling. The current government did not keep its promise to eliminate the fiscal imbalance entirely.

There is still a lot of work to do, and the Bloc Québécois will be paying close attention to the implementation of this budget over the coming months.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, I listened to the member for Abitibi—Témiscamingue.

He says that he will support and vote for the 2007-08 budget because the main advantage for Quebec is our plan to restore the fiscal balance.

I agree. We have a very good plan for restoring the fiscal balance. There is a lot of money for all the provinces and for Quebec.

However, I do not agree with the member when he says that the fiscal imbalance has not been corrected. I know it has been because the Premier of Quebec, Mr. Charest, has more money and he plans to lower taxes by $700 million. Therefore I know that the fiscal imbalance has been corrected in the province of Quebec.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, with all due respect for my colleague, I would invite him to listen to more than just the Premier of Quebec because the fiscal imbalance has not been corrected.

The Premier was in an election campaign. He said that he intended to invest the money received from Ottawa in tax reductions.

The government has to take into account that the elections were held on March 26. We shall see what the Government of Quebec will do with the budget to be tabled in early May. No one, not a single person in Quebec, from any party in the National Assembly, has said that the fiscal imbalance was resolved when the current government tabled its budget on March 19. Absolutely no one.

What was said is that it was a step in the right direction. The groundwork has been laid and we have to continue. But we must go further because the imbalance consists of at least $3.3 billion per year for Quebec. The government is not giving Quebec that amount this year. It is giving $2.2 billion.

The fiscal imbalance can be calculated any way you want. We all have the figures. I do not wish those listening to become lost in speculation. However, the fiscal imbalance definitely has not been resolved. There continues to be financial pressure on the Government of Quebec.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I would like to congratulate my colleague from the Bloc Québécois for his excellent speech.

I would like to add another point that concerns the fiscal imbalance and that is not talked about as much, but whose effect is extremely difficult for Quebeckers to accept. I am thinking of the fisheries. The federal government has not taken any action in the shrimp fishery crisis. Yet fisheries fall under federal jurisdiction. During a crisis, someone should step in and do something.

Just recently, the Quebec government, as it did last year, had to announce measures amounting to $8.5 million.

We know the imbalance is far from being corrected, since in seven years we will be in the same situation we are in today. Money is not guaranteed from one year to the next.

I must also add that there are imbalances when it comes to action in certain areas. Fisheries is unfortunately a good example of such an area.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I completely agree with my colleague from Gaspésie—Îles-de-la-Madeleine. If there is one thing he knows well, it is fisheries. I must say that I am less familiar with them, because I come from Abitibi—Témiscamingue.

I also know that if the federal government stopped spending money in provincial areas of jurisdiction, particularly in Quebec, and started giving Quebec the money to take care of its own affairs, there would be fewer problems. If the government stuck to its own affairs, that would be a big step in the right direction. The fisheries are a good example, as is Parks Canada, whose buildings are falling apart in some areas.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I am pleased to speak today on Bill C-52, the budget implementation act. My time today will give me an opportunity to address some of the points I did not have time to cover in my response to the budget.

Again, my main objection to this budget is that it accomplishes so little with so much.

The Conservatives managed to spend more money in this budget than in any one that preceded it and yet they have managed to help truly no one. I compare this Conservative budget to taking an entire crate of oranges and squeezing only one glass of juice from it.

In order to help solve the many problems facing our country, the previous Liberal government had created a number of social and economic programs, including the Canada millennium scholarship foundation, the summer career placement program intended for students and not-profit groups, as well as the CANtex program for the textile industry. We recognized the needs and came up with solutions. In some cases, the solutions found did not solve all the problems, but constituted an improvement nonetheless. We, the Liberals, showed Canadians that the federal government supported them and implemented action plans.

What do Canadians see from this government?

They do not see new programs. They do not see new initiatives. They do not see a government standing beside them.

They see a government that is obsessed with cutting programs and that uses smoke and mirrors to fool people into a sense of trust and confidence by spending more money than any other previous government in Canadian history.

Canadians can see that the current government does not support them and is interested only in slashing programs.

This is not a claim that the Conservative government's budget does not include any positive news. Nevertheless, the few good measures included in this budget are not enough to properly address the needs of this country.

I can use many examples to illustrate my point, but I will begin with perhaps the Conservatives' biggest failure: child care.

The Liberal government had signed deals with every province in the country to create new child care spaces. The Conservatives had no right to cancel these agreements. No new child care spaces have been created since their time in office, and paying a monthly allowance of $100 to parents for each child under six does not make Canadians forget about their broken promise.

Child care advocates and experts have stated that if the government is identifying child care as one of its priorities and then turning around and giving money to the provinces, it is an admission of the failure of their original so-called child care plan. One advocate even said the Conservatives have conceded that the former government had the right plan and it is following in those footsteps, with the huge exception of having 80% less of the funds that were available.

In terms of social policy, the previous Liberal government had an overall plan for Canada when it concluded child care agreements with the provinces. While respecting provincial jurisdictions, the agreements were modelled after the Quebec child care system.

The Liberals had a vision for Canada that took into account the needs of the modern family and also took into account a vision for the country that looked decades down the road. The Conservative answer is cheap vote buying that might look good in the short term but guarantees nothing for our future.

The poor platform in this budget does not stop at child care. The Conservative government has been abandoning Canadian businesses, especially the small and medium sized businesses that are the job creators in this country. The government expects that with a few piecemeal announcements Canadians will not see the effect of the numerous slashed federal programs.

I have received countless letters from business owners and their employees about the negative effect the government's actions will have on their businesses and jobs. One of these actions was the cancellation of the visitors rebate program. As vice-chair of the finance committee, I heard from various industry stakeholders about the terrible impact this cancellation will have on their industry.

The government did not give a satisfactory answer as to why this program was cut. As a result, the finance minister admitted his mistake by establishing a federal foreign convention and tour incentive program, but this solves only a small part of the problem the government created, as it does not address any tourism initiatives for individuals visiting the country. American tourism is on the decline in this country and the Conservative government seems intent on doing nothing to change that.

The budget also shows serious deficiencies when it comes to adult literacy. The Department of Finance announced funding for literacy programs, but this gesture appears somewhat hypocritical after the drastic cuts made to adult literacy programs last fall. The Conservatives must know that giving with one hand while taking away with the other is a hypocritical and deceitful way to govern.

One of the most dishonest showcases of the government is that of the environment. The announcements contained in the budget and those being debated today are positive ones, but some of these are simply a reintroduction of the previous, proven Liberal environmental programs.

Canadians do not believe the government's sudden about-face on environmental issues and Canadians still do not trust the Conservatives on this issue. This distrust is with good reason. In the recent budget, the Conservatives cut back Canada's commitment to renewable energy to 4,000 megawatts from 5,500 megawatts of support for clean and sustainable production.

The budget also keeps tax breaks for new oil sands expansion in place until 2015 to help with their plan for explosive growth. It slows our planned cleanup of lakes and waterways. It replaces rewards for those who make energy savings changes with gimmicks that cost thousands of dollars for every tonne reduced. It reduces funding to our provincial partners by half. There is no plan to make sure polluters pay for using the atmosphere as a free garbage dump.

It is obvious that the government has no plan for the environment. The public cannot be fooled into thinking that a few announcements or a rebate on a dozen cars constitute a vision for Canada's environment and for combating climate change.

In my presentation today, one focus has been on how the budget has failed Canada's business community, which helps Canadians by providing jobs, goods and services. During the budget debate, I spoke about how just the fact that the government refuses to lower the income tax rate to the Liberals' rate of 15% is reason enough that I cannot support the budget, in that it does not treat all Canadians fairly.

I have already discussed the failure of the Conservatives on the tourism front, but I would like to pay attention to some specific initiatives that were being promoted by business groups during the finance committee prebudget consultations and have been ignored by the government.

Canada is not keeping up the pace as it should be in the global economy. Not many people dispute the fact that one of the most important challenges before us as a country is lagging productivity, but the budget has the country standing still on this issue.

Other countries are moving forward. The changes for accelerated capital cost allowances are definitely a good measure, but it is not enough for industries, especially those in the manufacturing sector that have previously invested in capital and equipment either last year or even this year prior to the budget. They get no help.

The problem is also there with regard to industries that do not require capital investment but rely heavily on human resource investment. These industries also need help to keep Canada at the forefront of global competition and they have been shown nothing in the budget.

Money has been invested in universities to ensure that tomorrow's workforce is on the cutting edge, but the paltry sum allocated to the Canada foundation for innovation is barely enough to ensure its survival.

Although there are investments for Canada's 4,000 post-graduates, how about the hundreds of thousands of undergraduates who are being left out in the cold?

Although the changes to the sustainable technology development fund will help bridge the financing gap between ideas and commercialization, there is much work to be done to make our tax rates internationally competitive as well as expand access to Canadian goods in overseas markets.

The Liberal government had solid plans and programs in place to deal with the challenges facing our industries.

In 2005 we put forward the CAN-Trade strategy, which provided $485 million over five years to help Canadian businesses succeed in emerging markets. The Conservatives scrapped this initiative and have now replaced it with $60 million over the next two years.

The Conservative budget also cuts $970 million from the indirect costs of research program, which provides support to Canada's universities.

These are only a few examples of this government's catastrophic lack of vision. Some of the measures announced in the budget and debated here today constitute a few steps in the right direction but those steps are too little and too late.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Mr. Speaker, in my other life I happened to be involved in the tourism industry. The hon. member mentions the government's position on the former GST visitor rebate program. I know, having dealt with that program first-hand, there were a lot of problems with it.

He talks about the fact that small business was not being listened to, but let me quote Mr. Tony Pollard, who happens to be the president of the Hotel Association of Canada. In its release he says:

The Hotel Association of Canada (HAC) has congratulated [the] Finance Minister...and [the Prime MInister]...for their recognition of the importance of hotels in the new federal budget.

We applaud [the] Minister [of Finance] for maintaining the convention and tour component of the GST/HST Visitor Rebate Program...The Minister has always told us that he greatly values the economic development contribution of hotels across Canada. He listened to us.

This is what we hear from the industry.

I know the hon. member sat on the finance committee. Now that the government has recognized and fixed the program, which did have a lot of problems and which I know first-hand from my involvement in my private business, could the hon. member tell us why he thinks the government was not listening when in fact the industry leaders are telling us that the government did listen?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, there are a couple of issues. I have no problem with the hotel and convention industry getting their GST back, but I think part of the problem was that the program was not made better. It was cancelled and then reintroduced only for the foreign convention and tour aspect. Meanwhile, visitors who come here and rely on getting a GST rebate back are not going to get it.

We are in a competitive world. We are competing for tourism dollars. One of the attractions that Canada offers is this GST rebate, whether we believe it or not. In his previous business maybe he found this not to be a profitable type of business, or nobody obliged him. However, the witnesses we heard before the finance committee felt this business was not only profitable for them, it was also profitable for the tourism industry in Canada and it was able to attract additional visitors to Canada.

We should be listening to those people and finding a way to make the program work so Canadians benefit from the tourism dollars that come into the country.